Reliance Jio Hits Back At COAI As Warfare Begins In Telecom Again

India's telecom sector, once a sunrise vertical and the most litigious, is witnessing the comeback of old-style warfare between key operators pitched on either side of the divide.

Telecom Secretary Anshu Prakash on Wednesday met Cabinet Secretary Rajiv Gauba to discuss the way forward for the Committee of Secretaries set up to consider a relief package for the telecom sector. (PTI)

New Delhi: Telecom Secretary Anshu Prakash on Wednesday met Cabinet Secretary Rajiv Gauba to discuss the way forward for the Committee of Secretaries set up to consider a relief package for the telecom sector. The CoS has been set up under the chairmanship of Gauba and the meeting on Wednesday was to discuss the way forward on the telecom muddle.

India's telecom sector, once a sunrise vertical and the most litigious, is witnessing the comeback of old-style warfare between key operators pitched on either side of the divide.

The Cellular Operators Association of India (COAI) has written a midnight letter to Telecom Minister Ravi Shankar Prasad on the impact of the Supreme Court judgement on the annual gross revenue (AGR) issue. COAI has petitioned that "in the absence of an immediate relief from the government, two of the three private mobile operators viz. Airtel and Vodafone Idea, who provide services to around 63 per cent of current subscriber base, will face an unprecedented crisis".

The letter written by COAI Director General Rajan Mathews was dispatched at midnight to Prasad and Prakash.

"Given the urgency of the matter to the majority of our members, we feel compelled to submit this letter at the earliest. One of our members has a different opinion on the matters covered in this letter and will present their comments separately," Mathews wrote. The reference to one of the members was to Reliance Jio Infocomm.

Following the dispatch of the letter, Reliance Jio hit back at the COAI.

"We are shocked that you have issued the letter shared last night, when it was clearly communicated to you that we will be providing our detailed comments by morning of 30th October 2019," Pramod Kumar Mittal of Reliance Jio wrote to Mathews.

In a strongly-worded letter, Reliance Jio said: "This is a serious breach of trust on your part, that can only exacerbate the continuous relations between Reliance Jio Infocomm and COAI, all due to such actions by COAI, in the past."

Reliance Jio alleged that the COAI sent the letter to the Telecom Minister at the behest of two members. Although it did not take names, it is implied that the two names would be Bharti Airtel and Vodafone Idea.

"It seems that were extraneous considerations to send this letter, only at the behest of other two members. By such unwarranted behaviour, COAI has just proved that they are not an industry organisation but just a mouthpiece of two service providers," Reliance Jio said.

"We take strong exception to such action and request you to also share RJIL's divergent view with the Hon Minister vide a follow-up letter today itself, to prove your non-partisan intentions," the letter said.

In its letter to Prasad, the COAI has argued that "the unprecedented crisis" for Airtel and Vodafone Idea "could exacerbate the stress in the industry and potentially be catastrophic for the nation".

Painting a picture of the crisis likely to come, it said that investments could be curtailed, services could be deteriorate, jobs could be lost and investor confidence will most definitely be shattered.

In addition, very large government revenue stream of Rs 1.60 lakh crore from annual payments and spectrum dues from the two operators and bank loans running into nearly lakhs of crores could come under serious stress, the COAI has told the government.

The COAI has warned the government about a possible monopoly in the telecom sector. "Such an adverse outcome will trigger a chain of events which will result in a disruption to the entire business chain. The worst outcome of this would be India ending up with a possible monopoly in the telecom sector which will have its own adverse consequences..," it said.

Countering the COAI argument, Reliance Jio has said it completely disagrees with the COAI letter and it does not represent the industry view.

"We take strong umbrage at COAI exploiting the legitimate pay-out obligations to create an alarmist propaganda for the doom of telecom sector in the country," it said.

Reliance Jio has pointed out to the COAI that the judgement of Supreme Court is final and to be implemented as law of the land. "COAI's intent of using this as an opportunity to seek non-enforcement of the Supreme Court judgement and asking for relief is strongly objected by RJIL," it said that these operators have capacity and enough monetisation possibilities to comfortably pay government dues.

"We suggest that COAI, as an organization supposedly representing all operators, should stop blaming Hon Supreme Court for their orders but ask members to respect judgement and stop forum shopping for relief," Jio has told the COAI in a massive confrontation.

Commenting on the Reliance Jio letter, Mathews said: "This is a private matter between the members of the Association and will be addressed in due course within the ambit of the governance structure of COAI."

"We respect the inputs, feedback and opinions of all our members even though we may disagree with some of them. We stand by our letter on behalf of the majority of our Members and it stands on its own merits and needs no further explanation," he added.